Rising business costs 'could impact wages and growth'

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Rising costs are a growing problem for many firms

The Federation of Small Businesses (FSB) has issued a call to the government to address concerns regarding rising business costs, as failure to make headway on this difficult issue could have lasting impact on the ability of firms to grow.

FSB policy director Mike Cherry warned in response to the publication of the latest UK labour market statistics that firms up and down the country remain confident in the economic recovery right now, but there are growing concerns that rising costs could begin to hamper many company's ability to offer wage increases and attract the best talent.

Mr Cherry said: "Unemployment is historically low, but we are seeing a slowdown in recruitment and the persistence of weak wage growth.

"This should be taken as a warning sign that businesses are starting to become concerned about a number of emerging economic headwinds."

The latest government data showed that there were 28,000 fewer people classed as unemployed across the UK in January 2016 compared to October last year, with 1.68 million unemployed people registered in total.

Furthermore, average weekly earnings were shown to have risen by 2.2 per cent year-on-year. However, the impact of rising costs for many firms means that this figure could come down in the months ahead.

Mr Cherry concluded: "To boost productivity and raise wages, smaller firms need real progress on business rates, a firm commitment to simplification of the tax system and crucial investment in roads and broadband."